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Rep. Lipinski Introduces Bill Requiring Full Payment of Royalties to Taxpayers from Oil and Gas Production on Public Lands (July 22, 2015)

Congressman Dan Lipinski (IL-3) has introduced H.R. 3140, the Accounting for Methane in Production through Loophole Elimination on Oil and Gas Royalties Act. The bill helps ensure that natural resources on federal lands are developed responsibly and that Americans are fairly compensated for the extraction. It does this by eliminating exemptions that exist in current law, requiring oil and gas companies to pay royalties on all the gas removed from federal lands during production. This bill has been endorsed by two prominent national environmental groups, the Sierra Club and the Natural Resources Defense Council (NRDC).

“Resources on federal lands are being developed inefficiently, costing U.S. taxpayers millions of dollars in lost royalties each year, especially with respect to vented, flared, and leaked natural gas,” said Rep. Lipinski. “The Government Accountability Office estimates that approximately 40 percent of this natural gas could be economically captured from federal onshore leases, and this would increase royalty payments by about $23 million per year and reduce greenhouse gas emissions equivalent to up to 16.5 million metric tons of carbon dioxide, the same as removing 3.1 million cars from the road. Requiring royalty payments on this gas will lead to more efficient use of natural resources, a reduction in greenhouse gas emissions, and relief for American taxpayers.”

Oil and gas production releases methane into the air. Methane is 84 times more potent of a greenhouse gas than carbon dioxide, and new studies from the Environmental Defense Fund (EDF) show methane emissions from production sites are higher than previously thought. In addition, there are also more immediate negative health impacts. According to a University of Maryland study, emissions of natural gas from production sites can negatively impact air quality hundreds of miles away.

“Available control technologies exist to economically capture a considerable amount of natural gas that is being lost, resulting in taxpayers being delivered the royalties they deserve,” Rep. Lipinski said. “Estimates by Taxpayers for Common Sense put the loss to taxpayers at $380 million from 2006 through 2013 from onshore leases, corresponding to 665.7 billion cubic feet of gas, roughly equivalent to the average amount of gas consumed by all households in the state of New York in a year. Additionally, University of Texas at Austin researchers have reported that techniques to reduce emissions from well completions are effective at capturing 99% of the methane that was previously vented to the atmosphere.”

“Rep. Lipinski should be commended for introducing this commonsense bill, which eliminates the needless waste of millions in taxpayer dollars while fighting climate change,” said Elizabeth Thompson, President of EDFAction. “This bill is a win-win, and stops the irresponsible and unnecessary waste of a valuable American energy resource. We can balance federal budgets while creating a better future for our children by addressing climate change.

“This bill is a commonsense step to reduce harmful methane emissions on public lands that threaten public health and cause climate change. It is an important effort that will reduce climate pollution, improve protections for communities living near federal lands, and ensure a fair return for the American taxpayer,” said Matthew McFeeley of Natural Resources Defense Council (NRDC) in NRDC's endorsement of the legislation. “We hope the administration will also require use of best practices to curb methane pollution on public lands and enact rules that apply to all oil and gas operations across the nation. These steps together can help tackle the problem industry-wide and provide a powerful follow-up to the President’s historic action on carbon pollution from power plants.”

"For too long, Americans have had their resources squandered, while the fossil fuel companies run free," remarked Athan Manuel, Director of Sierra Club's Lands Protection Program. "Rep. Lipinski's bill puts the brakes to the oil and gas industry's free reign, and holds them accountable for the dirty fuels they continue to waste at the expense of the people's wallets and health."